written by khatabook | November 15, 2022

A Guide to the Silicon Valley and Startup Capital of India

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Table of Content


Despite Delhi's victory over Bengaluru as the startup capital of India, the southern city is not letting its pride slip. The government, policymakers, investors, and even opposition leaders in Karnataka seem unperturbed about their loss of rank, citing what matters: a substantial share of venture capital investments and a high number of unicorn companies. Keep reading to learn more about the startup capital of India and the best business city in India.

Did You Know? India's Economic Survey 2021-2022 indicates that Delhi launched more than 5,000 startups between April 2019 and December 2021, while Bengaluru launched 4,514.

Indian Start-up Capital: Delhi Vs Bengaluru

Indian startups are performing exceptionally well. Throughout the startup ecosystem, not only last year but over the years, investors have shown overwhelming interest and gained momentum at different stages of a startup's growth. Despite this growth, young entrepreneurs need help to come up with disruptive ideas due to this growth.

While this growth is positive, it is not uniform across all Indian states. The startup ecosystem's number and development are leading in cities like Bengaluru, Gurugram, Delhi, and Noida.

The number of unicorn-status companies in Bengaluru is still the highest and received the highest share of investment last year, even though Delhi added more startups.

The city called the silicon valley of India, Bengaluru has long been a city of dreams for startup companies, much like Mumbai is to aspiring actors. Bengaluru is a leading city when it comes to access to talent, financing, financial modeling, etc.

Also Read: Best Low-cost Business Ideas in Bangalore

Below are some reasons why Bengaluru leads the Indian startup ecosystem:

1. Supremacy of Tech

With its massive number of IT companies, Bengaluru has become the IT capital of India. Most startups require significant technical support, so this is a great place to find innovative ideas and great tech brains. It is only possible to scale up by leveraging technology, and Bengaluru has created wonders by encapsulating this. It explains well why startups originating from Bengaluru are more likely to upgrade to unicorns.

2. Living Cost

An active real estate market and a growing service sector contribute to the growth of businesses, including multinationals and startups. Also, the BBMP (Metro Bengaluru Municipal Corporation) provides residents with free water, reliable electricity, and a well-connected bus system. 

In addition to Delhi, Mumbai, Chennai, Kolkata, and others, Bengaluru hosts the sixth most Fortune companies worldwide. In Bengaluru, the average monthly spending can also cover the lifestyle of the city's most affluent areas.

3. Events and Meetups

Bengaluru conducts numerous meetups, other events, and hackathons all year long. For this reason, the city is one of the essential startup havens in the world. Entrepreneurs can share their experiences of overcoming hurdles and achieving goals at these gatherings and mix with the community. The speakers and other attendees can also share ideas and inspiration and present their products and network.

4. Investors' Count

The funding of startups allows them to get off the ground more quickly. In Bengaluru, it is easy to find many venture capitalists and angel investors. You will discover your guardian angel when you have a brilliant idea and the right mindset, vision, direction, and motivation for your startup. Karnataka's Commercial and Shops Establishment Act, 1961, allows entrepreneurs to apply for funds from the government if their business is registered.

  1. A startup policy was announced by the Karnataka state government, and multiple funds worth ₹300 crore in 2015 to support tourism, biotechnology, and animation companies.

5. The Unicorns

When there are a substantial number of startups, it is best to check the ratio of unicorns to startups to judge how an organization or group of organizations and factors treats a startup. 

The breeders of around 30 of India's 100 unicorns are in Bengaluru, which stands out from any other city. Acko, MPL, Cred, Meesho, CureFit, BYJU's, Razorpay, Blackbuck, Swiggy, etc., are among the significant unicorns born in Bengaluru. Given all of the previously mentioned factors, finding the right workforce, quality labor, ample opportunities for upscaling, and guidance in the right direction is resourceful for a founder.

Also Read: A Compiled List of Startups in Bangalore

Delhi - Current Start-up Capital of India

What makes Delhi the new startup capital of India? Let’s explore:

  • Adding more startups in the last two years, Delhi has replaced Bengaluru as India's startup capital, according to the Economic Survey 2021-22.
  • The survey document states that over 5,000 startups were registered in Delhi between April 2019 and December 2021, while Bengaluru registered 4,514 startups between April 2019 and December 2021.
  • With 11,308 startups, Maharashtra has the most recognized startups.
  • The Department for Industry Promotion and Internal Trade (DPI) registered more than 61,400 startups in India.
  • According to the Economic Survey, patents are vital to a knowledge-based economy.
  • According to the Survey, India filed 58,502 patents in 2020-21, compared to 39,400 in 2010-11 and 28,391 patents in the same period.
  • In 2021-22, there will be over 14,000 startups in India, up from just 733 in 2016 according to the Economic Survey -17.

Bengaluru Leads the Unicorn Race

In 2021, 44 Indian startups reached unicorn status. Bengaluru has the most unicorns on this list - companies valued at more than $1 billion.

However, what matters most is the investment that has come to Bengaluru and how many unicorns there are. Karnataka dominates in that area - 42-45 percent of the total unicorns are from the state. Gunjan Krishna, Industrial Development and Director Commissioner, Industries & Commerce Department, Karnataka Government, said that significant investments and angel funding are coming here.

There are a variety of Bengaluru startups that have made it to the unicorn club. Among them are Slice, Digit Insurance (fin-tech), CRED, Mensa Brands, Licious (online meat delivery), and Cure. Fit (wellness and health), Meesho, Vedantu, BlackBuck, Apna, CoinSwitch, Kuber, Groww, NoBroker, ShareChat, MPL, and Zetwerk.

Also read: How to Start An Online Saree Business from Home

Survey of Start-up Capital of India

  • This Economic Survey of India 2022 provides an overview of the past fiscal year's economic performance and an outlook for the next fiscal year. 
  • This survey was released ahead of the Union Budget 2022-23. 
  • Economic Survey 2022 also emphasized India's startup ecosystem.
  • According to the survey, 2021-22 will be an exceptional year for the primary markets, as there will be a boom in fundraising through IPOs. 
  • There were 75 public issues between April and November 2021, raising INR 89,066 Cr, much higher than in recent years.
  • Indian residents accounted for 40% of patent applications in 2020-21, up from 20% in 2010-11. 
  • From 81st place in 2015-16 to 46th place in 2021, India's ranking in the Global Innovation Index has risen by 35.
  • A survey among startup sectors covered space tech development in depth. 
  • From 11 startups in 2019 to 47 startups in 2021, the space sector has experienced an increase. 
  • This year has started better than last, even though 2021 was a big year for startups. 
  • There was a fivefold increase in funding for Indian startups in January 2022 compared with January 2021, and there were 196 deals struck throughout the month. 
  • Compared with January 2021, this resulted in an increase of 87% in sales.

​​​​​Also Read: The Top Startup Books You Should Read

Conclusion

A startup operating from Bengaluru and Delhi can benefit from the abovementioned factors. Startups can flourish in the city's abundant nurturing, allowing them to dominate the global business landscape. Bengaluru is indeed the Startup City of India because the state government provides the best infrastructure for the growth of startups. 

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: If I want to register or incorporate my company as a Private Limited Company, Registered Partnership Firm, or Limited Liability Partnership, can I visit the Startup India Portal and Mobile App?

Ans:

In such cases, two options are available.

  1. Entities can register through MCA or Registrar of Firms and then register as "Startups" on the Startup India portal and mobile app to take advantage of the Startup India platform.
  2. The mobile app and Startup India portal offer a seamless registration process. This facility will be available as part of Startup India's second launch phase.

Q: When can an existing entity obtain a certificate of recognition as a "Startup"?

Ans:

Once the application is submitted, you will get the certificate of recognition in real time upon completing the registration process.

Q: Is it possible to register an existing company as a "Startup" on the Mobile App and Startup India Portal?

Ans:

Startup India's portal and mobile app allow existing entities that meet the criteria indicated to take advantage of various benefits and register as Startup.

Q: How long does recognition as a "Startup" last?

Ans:

Upon completion of ten years of registration/incorporation or if its turnover exceeds one hundred crore rupees in any previous year, an entity ceases to be a startup.

Q: Which government schemes do startups qualify for under the Action Plan announced on January 16, 2016?

Ans:

  • An entity that wishes to benefit from various benefits (except tax and IPR-related benefits) would need to apply for Startup India recognition via the Startup India portal or Mobile App.
  • The Inter-Ministerial Board of Certification must certify a startup as an eligible business to qualify for tax and IPR benefits.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.